- Under Making Tax Digital for Businesses, businesses and self-employed individuals will be required to keep digital records of income and expenses and submit quarterly summary updates to HMRC starting in 2018/2019 depending on turnover. - Those with turnovers under £10,000 are exempt, as are those who cannot file digitally due to disability or location. - Businesses will record income and expenses in software, then submit summary totals to HMRC. Regular updates provide certainty over taxes and help avoid errors. Costs may include software, hardware, support, and additional time for record keeping and reporting.

1. Making Tax Digital for Businesses
Cloud accounting

2. Making Tax Digital for Businesses
• Businesses (including self-employed and
landlords) will be required to keep records of
their income and expenditure digitally, and
send summary updates quarterly to HMRC
from their software (or app).

3. NEW RULES : MTDfB
Businesses, self-employed people and landlords will
be required to start using the new digital service
from:
 April 2018 for income tax and National Insurance
contribution (NICs) purposes if your turnover
is over the VAT threshold
 April 2019 for income tax and NICs purposes if
your turnover is below the VAT threshold
 April 2019 for VAT purposes for everyone who is
VAT registered
 April 2020 for Corporation Tax (CT) purposes for
everyone who pays CT

4. Who will be exempt?
• Businesses, self-employed people and landlords
with turnovers under £10,000 are exempt from
these requirements.
• Those in employment who have secondary
income of more than £10,000 per year through
self-employment or property will also be
required to use the digital service.
• Those who genuinely cannot get online due to
their individual circumstances such as disability,
geographical, or other reasons, will be exempted
from these obligations.

5. Providing HMRC with
updates
• Businesses will record and categorise receipts
and expenses in their record keeping software
You will send a summary update to HMRC
when this is due, which you will be able to do
directly from your software or app.
• Updates to HMRC will contain summary data
only - for example, this could be the totals of
the categorised income and expenditure.

6. Advantage –s
• Updating HMRC regularly will give you more
certainty over your likely tax bill, allowing you
to manage your cash flow more effectively
throughout the year.
• HMRC wants to do more to help businesses
get their tax right and these changes are a
very important step in that direction. It will
help businesses steer clear of avoidable
errors.

7. What costs are involved?
• time spent in your business familiarising with the new
processes and conversion to these new processes
• software expenditure costs (new or upgrading
software)
• hardware expenditure costs (purchase of a computer,
tablet device, etc)
• additional support from your accountant or tax agent
• additional time spent gathering and inputting data
• additional time reporting obligations through
providing regular updates and any end of year activity

8. CLOUD SOLUTION

9. Advantages of XERO cloud solution
• Get paid faster
• Run your business on the go
• Reconcile in second
• Have control over your cash flow
• Instant access to your financial reports
• Don’t worry about backup
• Connect 3rd party apps

10. XERO ACCOUNING SOLUTION
“ Life before Xero was a nightmare. I was
basically using an Excel spreadsheet set up by a
friend. The amount of time it took was
ridiculous “

13. Contactus today
office@prevailaccountancy.co.uk
Tel: 01706 550 825